Air China Plans CNY 7.8 Billion Capital Raise via Private Share Placement

Air China (CA) has announced its intention to raise up to CNY 7.8 billion yuan (USD 1.1 billion) through a private share placement to fund new aircraft acquisitions and bolster working capital, according to a stock market filing on December 22, 2023.

While specific details about the aircraft purchases were not disclosed, the filing mentioned that the funds would be utilized to optimize the fleet structure, expand the fleet size, enhance security assurance capabilities, and accelerate the realization of strategic planning. Approximately CNY 4.2 billion (USD 596 million) is allocated for the acquisition of 17 aircraft, including six C919s and eleven ARJ21-700s, with deliveries scheduled for 2024 and 2025.

Air China Limited plans to issue new A-Class Shares to China National Aviation Holding (CNAHC) and H-Class Shares to China National Aviation Corporation (CNACG), both state-owned enterprises. The A-Class Shares will be issued at CNY 7.02 each, raising approximately CNY 6 billion (USD 851 million), while the H-Class Shares will be issued at HKD 5.09 each, raising around CNY 1.8 billion (USD 255 million). The funds will be utilized for aircraft acquisitions, working capital replenishment, capital structure improvement, financial soundness strengthening, risk resistance capabilities enhancement, and boosting market confidence.

This capital raise follows Air China’s earlier successful issuance of CNY 15 billion (USD 2.1 billion) in 2023, reinforcing the airline’s commitment to strategic expansion and financial stability. The new share placement is subject to shareholder and regulatory approval, with Air China planning an extraordinary general meeting to vote on the proposal.

Stay tuned for updates on Air China’s capital-raising initiatives and their impact on the airline’s growth and operational capabilities.